Are You Sure You Understand Dell Stock’s Risk?

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Holders of Dell Technologies (DELL) stock may feel safe while AI server orders keep turning into profitable sales. The shares have returned 233.2% over the past year, against 16.5% for the S&P 500. Yet Dell stock fell 11.4% over the past month while the S&P 500 was flat. When the whole market has turned before, how far did Dell stock fall, and how long did it take to recover?

How Far Has Dell Stock Fallen In Market Sell-Offs?

In market sell-offs, Dell stock has fallen nearly twice as far as the S&P 500. Across the seven sell-offs it has traded through, Dell fell 27.1% on average, against 14.5% for the index. Its deepest fall among them came in the 2020 COVID-19 crash, when Dell lost 46% while the S&P 500 lost 34%.

Dell stock has usually recovered within a year, posting a median wait of 2.7 months from the low back to the earlier high. A sell-off in mid-2024 proved to be the exception. Dell fell 39% during that period while the S&P 500 fell 7.8%, and the shares needed 13.8 months from the low to recover.

Are Dell’s AI Orders Turning Into Sales?

So far they are. Management said Dell recognized $16.4 billion of AI server revenue in fiscal Q2 2027. Dell’s revenue reached $151 billion over the twelve months through that quarter, up 49% from a year earlier. Growth had been 10.5% a year before that. Management said on the September 1, 2026 call that Dell ended the quarter with a record $95 billion of AI backlog, representing orders still waiting to ship.

Dell is also keeping more of each sale as operating profit. Its operating margin over the latest twelve months was 9.6%, up from 7.1% a year earlier. Its gross margin has slipped each year, though, dropping from 23.4% in the twelve months ended August 2023 to 19.8% in the twelve months ended July 2026.

Where Dell’s Profit Is Under Pressure

Dell’s profit has held up so far, and management said on the September 1 call that its gross margin outlook for the second half had improved. The company still described pressure on profit in several places. Memory chips are the tightest part: management named DRAM as the main constraint, followed by NAND, and called processor shortages spotty. Supply is already limiting sales. Traditional server and networking revenue rose 122% to $10.5 billion in fiscal Q2 2027, and management said demand was even greater. Management also said Dell’s input costs continue to go up, and that part of the server growth comes from price increases.

Management expects profit to slip in Dell’s Client Solutions Group, which serves commercial and consumer customers. Management expects the group’s operating income rate to moderate to roughly 6% in fiscal Q3 2027, as Dell balances demand, share and profitability. Management said Dell saw signs earlier this year that the PC market would soften in the second half, and that more cost-sensitive customers are extending their upgrade cycles.

With AI orders still turning into sales, the Client Solutions Group’s operating income rate is the number to watch when Dell reports fiscal Q3 2027 results, expected in November 2026.

How To Act On DELL?

Not necessarily on Dell Technologies alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here is one company from Dell Technologies’ own industry that has beaten it. Over the five years to October 2026, Seagate Technology stock rose 877%, while Dell Technologies stock rose 841%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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